Agenda item

Further to Minute No. 178 of the meeting of the Cabinet held on 28^th March, 2012, consideration was given to a report presented by Dave Richmond, Director of Housing and Neighbourhoods, which detailed how from 1st April, 2012 the current Housing Revenue Account (HRA) subsidy system would cease and a new a self financing process commenced.  Over a thirty year period this new system may produce significant surpluses.

Based on the assumptions, the Council would be able to maintain its housing stock to the decent homes standard and also be able to invest in other priorities, for example an ongoing programme of building Council houses to deal with the acute shortage of affordable housing in the Borough.  Such a programme had the ability to deliver training and job opportunities which could have a significant effect on regeneration in the Borough.

Initial financial modelling had taken place and indicated that:-

·              Current housing stock investment plans can be delivered.

·              Debt could be serviced and/or repaid.

·              Surplus resources can meet long term and wide ranging investment needs.

The report also demonstrated that whilst the surplus resources could be accessed, an alternative funding vehicle may be required to effectively “bring forward” or “smooth out” the projected surplus resources from the latter part of the Business Plan.

The Cabinet had agreed to bring forward proposals for possible future investment priorities and to work up formal proposals to utilise the available £33M borrowing headroom. This work was already underway and could largely be achieved from existing resources. However, a more fundamental piece of work related to the longer term strategy for Council estates. To achieve sustainable estates, which remained attractive places to live in the longer term, it would be necessary to consider a range of more significant interventions. Support would be required to undertake a rigorous and robust process aimed at informing estate based investment decisions.  In determining investment priorities it would be essential that as a Council there was a clear understanding of the viability of each housing estate and the works that would be required to ensure that they were sustainable and desirable areas to live. This could potentially involve significant remodelling, investment or disinvestment. 

A discussion and question and answer session ensued and the following issues were raised and clarified:-

·              Housing list review and whether the figures were a true reflection of numbers.

·              The various options that had been modelled and the outputs expected.

·              Approval of the capital investment and the risks and uncertainties involved.

·              Whether the options had been based on the current levels and if the Right To Buy Scheme had had any effect.

·              Assumption of rental income and the rental income recovery rates.

·              Changes of housing benefit and how this may affect the thirty year modelling.

·              Monitoring of the detailed plan and validity of the figures contained.

·              The Council’s Framework Agreement with Pricewaterhouse Coopers and the inclusion of the cost in the Review of Consultants.

·              Additional spend on repairs and its requirement given the Decent Homes Programme.

·              Activities that may be the responsibility of the tenant and how this may affect the assumptions.

·              Use of the Capital Investment and whether this was to be shared borough wide.

·              Mechanisms to access funding and additional support.

·              Asset management and the quality of information.

·              Mitigation of risks for those properties of poor quality and condition.

·              Formulae for rents and whether the repairs would lead to an increase.

·              Continued monitoring by the Overview and Scrutiny Management Board.

Resolved:-  (1)  That the work to facilitate the borrowing of up to £33M (permissible against the debt cap ceiling), in order to address short to medium term housing related investment priorities be noted.

(2)  That the submitting of a further report to Cabinet identifying and costing these short to medium term priorities for consideration and approval be noted.

(3)  That the securing of external support to assist officers be noted to:-

·              Define and model future Investment methods available across the term of the Business Plan.

·              To undertake an estates needs analysis and investment planning as described in Section 10.0. 

(4)  That the injection of an additional £1m p.a. into repairs as described in Section 9.2 be noted.

(5)  That a further report on progress be submitted to the Overview and Scrutiny Management Board in due course.